The effects of digitization on credit provision
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2020-08-21
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en
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This study examines the effects of digitization in the lending industry on credit provision. Where
previous research is focussed on the rise of online lending firms and platforms, this research focuses on
banks. Digitization is expected to have a negative effect on the amount of credit provided by banks
because of the increase in competing firms offering credit due to digitization. A panel data set on German,
French, United Kingdom and United States commercial banks is used covering a period from 1990 to
2019. To test for the relationship between competition, digitization, and credit provision, a fixed effects
regression is performed, controlling for time invariant bank-level factors. Moreover, several robustness
checks are performed. No evidence is found for a negative effect of competition on bank credit.
Moreover, no evidence is found for the negative effect of digitization on the relation between
competition and bank credit.
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Faculteit der Managementwetenschappen